Hapag-Lloyd and UASC Finalise Merger Agreement

The new Hapag-Lloyd is expected to rank among the world's five largest container shipping lines once the merger is completed by late 2016.

The United Arab Shipping Company S.A.G. (UASC) Monday announced that it has finalised a business combination agreement with Hapag-Lloyd AG (Hapag-Lloyd), which will see the merger of the two companies once required regulatory and contractual approvals are received - expected by the end of 2016.

"Following the integration, the new Hapag-Lloyd will rank among the five largest container shipping lines in the world, with 237 vessels and a total transport capacity of around 1.6 million TEU, an annual transport volume of 10 million TEU and a combined turnover of approximately USD 12 billion," explained UASC.

Upon completion of the merger, UASC notes that the new entity will remain a registered, stock-listed company in Germany, with its head office in Hamburg.

Further, it is noted that Compañía Sudamericana de Vapores (CSAV), HGV (City of Hamburg), and Kühne Maritime GmbH (Kühne Maritime) will hold their position as controlling shareholders of Hapag-Lloyd after the merger is complete, while the majority shareholders of UASC, Qatar Holding LLC (QH), and The Public Investment Fund of the Kingdom of Saudi Arabia (PIF), will become new shareholders of Hapag-Lloyd, holding 14 percent and 10 percent, respectively.

"This strategic merger makes a lot of sense for both carriers – as we are able to combine UASC's emerging global presence and young and highly efficient fleet with Hapag-Lloyd's broad, diversified market coverage and strong customer base. Furthermore it will give the new Hapag-Lloyd access to Ultra Large Container Vessels," said Rolf Habben Jansen, CEO of Hapag-Lloyd.

"After the successful integration of CSAV which was concluded mid of 2015 this transaction with UASC is another historic milestone for Hapag-Lloyd. The merger reinforces our position as a top 5 and one of the largest truly global carriers in liner shipping."

UASC says the newly merged entity will become a key player in the new "THE Alliance," which currently includes Mitsui O.S.K. Lines (MOL), Nippon Yusen Kabushiki Kaisha (NYK), Kawasaki Kisen Kaisha Ltd. (K Line), Hanjin Shipping Co. (Hanjin), Hapag-Lloyd, and Yang Ming Marine Transport Corp. (Yang Ming).

Last week, Hyundai Merchant Marine (HMM), which had initially been expected to join THE Alliance as well, announced that it has signed a Memorandum of Understanding (MoU) with the 2M carriers, Maersk Line and Mediterranean Shipping Company S.A. (MSC) to join in a 2M Vessel Sharing Agreement (2M VSA), effective April 2017.